Startups winners as Equinix plans $68m Melbourne data centre

After years of customer requests, Equinix has announced a $US60m ($A68m) investment in a Melbourne data centre that will be its fourth Australian site – and a potential "incubator" for Victoria's tech-heavy startup community.

Data centre operator Equinix will actively work with technology startups to help them leverage its expanding infrastructure footprint once its ME1 facility – announced today as the focus of a $US60m ($A68m) investment in a new Victorian facility – opens at the end of the year, the company's local managing director has said.

The ME1 International Business Exchange (IBX) facility will initially offer 375 cabinets' worth of space across a 105,000 square-foot building in urban Port Melbourne that will provide five-nines availability and 24x7 support as well as creating 20 local jobs by 2015.

Capacity in the facility – which managing director Tony Simonsen said had finally been green-lit by global management after several years in which customers lobbied the company to open a Melbourne site – will eventually reach 1500 cabinets and complement the company's existing three Sydney facilities.

"Melbourne has consistently been one of the states that our customers have requested for us to be in," Simonsen said.

"We go through a very rigorous process about our business cases, but it feels like the right time based on what we're seeing in the marketplace and what our customers want."

The company was "finalising negotiations" with global and local customers based on the planned completion of the facility, construction of which will begin shortly in the bayside suburb just kilometres from Melbourne's CBD.

Equinix operates over 95 other data centres in 32 countries, with 19 data centres in 17 countries across the Asia-Pacific region alone.

Growing demand for cloud-computing services would form a key part of the business going forward, said Equinix Asia-Pacific president Samuel Lee, who also noted the value of a Melbourne facility in helping companies "push their applications close to customers."

The availability of a Melbourne site would help companies "reduce latency, reduce costs and improve the customer experience," Lee said. "We see great opportunity to help Australian and multinational customers expend their IT platforms. We are very committed to help our business partners and customers connect with each other, and with the different ecosystems inside the data centre."

"It feels like the right time based on what we're seeing in the marketplace and what our customers want." – Tony Simonsen, Equinix

Startups as well as established companies would benefit from the increasing availability of Australian infrastructure capacity, Victorian ICT minister Gordon Rich-Phillips said at the announcement of the Equinix investment, which follows recent similar investments by the likes of Vocus, Digital Realty and the NAB.

Although he could not put a dollar figure on the benefits reaped from other companies' past investments in the state, Rich-Phillips said the availability of infrastructure was crucial in enabling the growth of startup and established businesses alike.

"We know that if we don't have the infrastructure, we won't encourage startup activity," he said. "As they navigate their way through the hurdles, we [ensure] we have that basic infrastructure in place to encourage the startup community and other users of the facility."

Rich-Phillips pointed to fast-growing industries such as biotechnology and nanotechnology, both of which are massive consumers of computing power and are well represented in Melbourne's substantial startup community.

"If we don't have that infrastructure, we can't develop that startup community," he said. "We see this as one of the great strengths of the Victorian infrastructure: we have a very strong R&D capability, which is what drives our startup capability."

Simonsen agreed, noting that the Equinix facility in Sydney had become "an incubator for startup organisations in many respects. We will absolutely be doing the same thing in Victoria."

Artist's rendering of Equinix's ME1 data centre, which will eventually offer 1500 racks' worth of space in a facility in the bayside suburb of Port Melbourne. Image: Equinix